Long run: We’re all dead

​Recently, ex governor of RBI, ex finance minister and ex prime minister, Dr Manmohan Singh became the butt of all jokes when the renowned economist quoted the very great, Sir John Maynard Keynes:

In the long run, we’re all dead.
But I would like to take his case forward because as an economics student, I somewhere believe the man has got a point!

Source: localpress.in

In economics, short run, medium run and long run are/can be never properly defined. A short run for a policy can be 6 months in one country and 60 years in another country.
For example, Japan after atomic attacks wanted to grow industrially by increasing production. So companies like Daikin, Toyota etc came up and despite poor agricultural endowments; they were able to spur growth. The economic theory says that when production is increased to improve growth rate then consumption levels initially are compromised of the public in the short run (due to increased investments in production) but in the long run as profits start coming; incomes increase and expenditure/consumption rises too. And medium run always means the equilibrium. So here, medium run would be investment = consumption. 

Japan adopted this policy in 1950s and here we are in 2017, and yet the short run of Japan hasn’t ended. Currently, they’re having 0% lending rates yet none are taking up loans or consuming a substantial part of their income. This downfall in expenditure/domestic demand is what’s restraining japan from competing with China, us etc. It’s not the lack of technology there but the lack of young population (who generally demand the highest goods and services) 
Most of their population is ageing.
Compare it to India where I think 65% are below 25 and hence, demand is an all time high affair. And this brings inflation, currency depreciation, fiscal deficit etc in India.
So the thing is:
1. Long run can be as long as eternity
2. Till the time long run comes, external factors begin affecting the policy’s objective. Here, that externality being age group of population. Other common ones are political scenario, central banks efficiency etc
3. Long run NEVER comes. Like I said, medium run is equilibrium and in economics, equilibrium is a mirage. We can/should aim for it but in the foresight, its good to know that we’ll never reach there. However, in pursuit of coming closer to it we can grow.. That’s it.
Since there’s no medium run, there ought to be no long run.

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DEMONETISATION, HEAR ME TOO?

For a lot of years now, I’ve been believing that black money within India is necessarily present as cash only. However, the recent onslaught against the demonetisation policy pushed me to spend a few days digging for answers to every cross question put up, finger pointed and doubt raised. After all, how can the likes of Pulapre Balakrishnan, Prabhat Patnaik be so confidently wrong?!
What Modi did right?

This scheme has rightly halted the businesses of D-Company, Maoists and other terrorists who had crores of counterfeited notes. Cashless transactions, as inevitably forced down the people’s throat has found its way via PayTm and others, as they reportedly claim a 200% hike in transactions since November 8, 2016. Tax amnesty scheme and the probable, Benami land ownership are smart moves too.

What went wrong?

Historically, demonetisation has been implemented only under hyper inflationary circumstances. Using this traditional sequence of events as a point to counter the recent  policy is just the beginning of a tsunami of reasons that make this move alarmingly unrequited and political.

I believe that priorities matter. Is your concern to catch the offenders and their coffers or is it just to seize the stash of black money from their pockets? Well, for Modi & Co it’s certainly the latter. The very fact that bank employees are being “overworked” and the I-T department not, says it all.

This “overworked” is different in context from the usual one too, thereby making things worse. I’ll explain how: when banks are being put to function as centres of deposition of a defunct currency and withdrawal of the new one; pragmatically there’s no business going on within the banking sector. It has come to a giant halt.

In addition to this, the term “demonetization” in itself is very perplexing and questionable in the present times. It means to do away with a higher denomination currency. But in India, what has happened is not merely the warding off 500 and 1000 rupees notes but surprisingly, a higher denomination currency ie 2000 rupee notes, has been injected too. 

Speaking about history, right from Weimar Germany to Morarji Desai’s policy implementation demonetization has and as economists mostly point out, should only be executed in case of a presence of a very high denomination currency which is allegedly affordable only by the black marketers and hoarders of unaccounted cash. That currency can never be 86% of the total cash circulation!

In addition to this, by allowing farmers to transact with Rs 500 notes after very lately realizing that the timing of announcing the policy clashed with the sowing season, I doubt how this is going to work. It’s honestly strange! To say you’ve demonetized a currency and then to allow the major employer of your nation to transact in it is a paradigm in itself.
Moreover, perspectives matter more than facts when you try to analyse any economic policy. For me, money laundering at present will lead to financial inclusion of the unaccounted amounts of money but is this a win for the policymakers? Is this the aim with which the PM flagged off this policy? 

Rich business tycoons all over the country are dealing in black to save their prior savings and worse, get it converted into white and safely stored in bank accounts!! 

Explanation runs simple: say I’m a corporate business owner with 50 crores of black money in cash. I hire a CA who acts as an intermediary to find someone who has a bank overdraft of nearly the same amount. What happens next? The deal gets negotiated. The borrower from the bank agrees to clear his loan by paying 40 crores of cash to the bank, earns a certain commission in easing the wounds of the businessman and the CA goes home with a hefty commission too. 

The daily media reports which run the news that “6 lakh crores have been deposited in PSBs…” etc hail the policymakers but I’ve my doubts. If I’m able to park 80% of my black money in a bank by paying in black to the borrower and the CA in the process, how can the government see my deposits as their victory?!
The second story is very well known. You simply hunt for all your near and dear trustworthy ones whose bank accounts are really handy for you in the moment.

So to say that black money is being financially included through the regime ticks all the boxes right but to take this money laundering as a triumph against the battle of black money is naïveté.

To take the argument further, I don’t understand who throws the axe on one’s own poor feet? The supporters of the policy till now had one thing which could be considered a biggie to cheer about and sadly, it’s been taken away from them too. Enormous influx of cash in the banks was being taken as a sign of ease in lending rates and growth of credit market. Market stabilisation bonds were being eyed. But to make the matters worse, RBI has announced a CRR of 100% to strictly control the liquidity and thereby, possibly lead the lending rates unchanged. 
Second question that comes out of this is: why are the banks depositing the cash they’re accumulating as government securities and not increasing their loans with it? For PSBs, one can get that the lack of capital and NPAs make them unable but why aren’t the private banks stepping in?

What should’ve been done?

Instead of being so unrealistically quick in implementing the entire scheme in one go, the de facto leader should’ve launched it in steps. To begin with, real estate and gold transactions beyond a certain limit should’ve been made mandatory to be taken place online only. 14 lakh crores have been spent in printing the new “high security notes”, which’ve already been counterfeited in Chikmagloor, Bengaluru. (Counterfeiters in the business!)

RBI should’ve laid a greater impetus on market stabilisation bonds and should have speculated the falling stock market and currency in the ForEx market. Corrective measures should’ve been there in the hindsight.

This meeting of political agendas by fooling people will compromise the growth rate significantly and the nation will sadly still laugh at one of the major economic reformist of the nation: Dr Manmohan Singh. 

A policy which has already failed in India twice has been introduced to test the waters and glorify the “third time lucky” phrase.

Conclusively, I just cannot digest that such a macro move has been taken with so many miscalculations. 

MASCULISM

Poets were weaving magic with lexicons that were the delirium of the streets; writers rekindling the same. “There is something wrong”, a boy with a baffled expression on his face quipped from the ghetto of lovers of all sorts… The drunkards, the mavericks, the hysterics and the sob story tellers.

He hated how his brothers were being hated for women who were trying to fit into sizes, most of them didn’t ask them to. Crashing on the floor while dieting, they got up just to accuse, “It’s you for whom we do that”.

Men were the crass of cacophony and the buzz of all loathful songs. 

And then, narrations were soaked in idealism; to elevate men and, to redeem men. To redeem them from the racist outfits of “the darker sex” which no one ever questioned.

They refurbished facts, smashing details on anyone who tried to default.  

“Men are called so only if they have a penis.”

 “Correct”, they approved.

“A man feels like a MAN only if the elongated penis makes its way up til the cervix.” 

“Foul! Sexism!!!”, they winced.

One among them marked another fury, thereby demanding his rights: 

“Alimony looms over me worse than banks seeking mortgage”

Etiquettes in the name of “Ladies first…” drained their time and energy very often, they complained with sore feet (after waiting for long in queues). 

Sexual abuse is always horrific. ‘Men empowerment movements’ and pressure groups were lost as were the ‘men’s protection rights’; thereby tying a noose around justice and fair treatment.

And in the end, when they lit cigarettes to protest against being robbed of freedom… They were laughed hysterically upon owing to the ruins (female suppression) by their ancestors. 

​THE ORPHAN

There’s an adult in the orphanage with two sets of potential parents. Both are willing to go to any extent for procuring the young adult who has suffered all her life but is still resplendently beautiful.
The administrators of the orphanage give the orphan the choice to self select one couple as parents from now on.

Both couples lure the child by promising her nutrition, protection and opportunities to grow and learn in their respective homes.
But the child is adamantly reluctant as she chooses freedom over subjugation of either couple.
So both parents bribe the administrator, seek underworld’s help and use force to assert ownership on the dazzling beauty against her will.
Yes, living under the fortification all through her life, she now craves for the atmosphere where she can make her own mistakes and convert some of them into triumphs.
Unfair as life is, she fights battles against the systems in place, bleeding every now and then. All because the two claimants don’t even care about what she wants rather choose to settle the matter over never-ending fights amongst themselves.
Trenched warfares follow guerilla wars and arrays of bullets.  Add to this, danger at the terrestrial borders, discomfort at the naval bases and threats looming in the aerial drones. 
The young girl is terrified, always floating in terror of further turbulence with her nose just above water.
She’s wounded by pellet guns and raped  by the so-called protectors from either side perennially but still searching.
Searching for the deafening alarm bell that rings in the ears of both India and Pakistan. And shouts out loud and clear, to put an end to their intents to subjugate a territory by forcefully acting as parental bodies. 
May Kashmir (the orphan) hail one day!  

JAPAN’S ANNUAL PENIS FESTIVAL

This is a fertility festival. Childless couples attend this festival praying at the temple for children. This festival is religiously serious. In Japan, all those who haven’t had sex for a year, have it during the festive season. Prostitutes provide free sex to their customers, especially singles as a souvenir to the festivities.
Foreigners have described this in sexual terms and younger generations attend for fun. You will find couples cradling a symbolic wooden penis while following the procession around towns. There are some in the boxes that one can buy from the temple and have it blessed.
Wives who wish for a child keep this in their purses like an amulet. Please respect this practice not only religiously but for the couples who are trying to have children and want a family.

WOMEN CAN BE SEXUALLY AS FREE AS MEN

In the dictionaries, prostitution is defined as an ‘act or practice of engaging in sexual intercourse for money’, but a prostitute can’t be simply a woman who sells her body (money plays a subtle part in all sorts of sexual relationships), since that is done everyday by myriad women who become wives in order to gain a home and livelihood. There are several women in the world who engage in flings with their husbands so as not to be rendered homeless, not to get victimized by domestic violence in negation to their husbands and so on. So for me, prostitution is the act of rendering, non-reproductive sex against payment to the desired clients.

The dangers people vociferate while voicing their discomfort in the legalization of prostitution are that of increase in sexually transmitted diseases, global human trafficking, violent crimes like rapes and homicides. Prostitution is coveted as inherently immoral, commercially exploitative, empowerment of the underworld criminals and it also promotes the repression of women by men. Scientists claim that sex work and psychiatric morbidity are closely associated.

So to wipe off such fears of ‘dangers’, I would love to highlight the title of my write-up. The legitimate prostitution will construct a socially safety valve for single men/women or unhappy married men/women, at a low risk of sexually transmitted diseases like AIDS. This will be ensured because after legalization the government will take appropriate measures towards the health of prostitutes and preventive measures against the diseases as well. The unavailability of registeries/rosters of prostitutes hampers scientific research (that could have been handy to introspect further) and this is because it is considered illicit.

Legalization would suffice with ‘no middlemen, no pimps’ approach and will hence, reduce crime. In the current modern day scenario, slavery, exploitation of vulnerable people and child prostitution are also practiced. These all malpractices can be swayed away from the society by the legalization. When brothels will get legalized then it will tackle with the above mentioned worst aspects of the sex trade; in addition it will also provide access to social and health care.

The regulation of prostitution will increase the tax revenue, help people out of poverty, get prostitutes off the streets, and allow adults to make their own choices, will clear the path for victimless crime and legitimate business just as the institutionalized sex industry does. Strip shows, nude juice bars, massage parlors and saunas, brothels, adult book and video stores, peep shows, live sex shows, sex rings, escort services, mail order brides, street walking and pornography are to name some.

The regulation of prostitution by zoning is a physical manifestation of the same social/psychological stigma that decriminalization advocates allegedly want to avoid. Reflecting the social isolation of those in it, prostitution is often removed from the mainstream. Whether in Turkish genelevs (walled-off multiunit brothel complexes) or in Nevada brothels (ringed with barbed wire or electric fencing), women in state-zoned prostitution are physically isolated and socially rejected by the rest of society.

Last but not the least, I sincerely want to brush away the thoughts people have for prostitution as a threat to the holy knot of matrimony. Sex within a committed relationship is superior to casual sexual contact and the two people start feeling emotionally secure with each other, and this emotional bonding costs no money. These beauties of a committed relationship will appeal to even those who have access to prostitutes. Sex workers provide committed couples a way to gratify needs for sexual variety without risking the emotional attachments arising from sexual affairs.

At the end of the day, let’s accept it: a profession that contributes a whopping 60% towards the economy of Asia can’t be corroded away from the society briskly. So let’s do our bit to at least get prostitution regulated so as to better off the lives of a section of society, who do the hardest job in the world. Let us strive to get them their dues.